spotlight europe# 2015 / 02 — July 2015

A Gulf CSC Could Bring Peace and Greater Security to the Middle East

spo

tlig

ht

euro

pe

# 2

01

5 /

02

Christian-P. HaneltBertelsmann Stiftung, christian.hanelt@bertelsmann-stiftung.de

Christian KochGulf Research Center Foundation, ckoch@grc.net

Wars continue to ravage in Syria, Iraq and Yemen. Refugees are wandering around aimlessly in the Middle East with many fleeing to Europe. Saudi Arabia and Iran are adding fuel to the flames. They are vying for supremacy while remaining highly suspicious of each other. A Conference for Security and Cooperation could help to ease existing tensions. Many years ago the CSCE was a resounding success. It could thus serve as a blueprint with the nuclear agreement with Iran as a star-ting point of such a venture.

Tensions in the Middle East are getting increas-ingly worse. War has engulfed Syria, western Iraq and Yemen. Borders are losing their relevance, while state structures are disintegrating. The various conflicts tend to be defined by ethnic and religious cleavages. Minorities ranging from Christians to Yazidis, and even majority groups such as the Sunnis in Syria, are being driven from their homes. Churches have been torched. There have been attacks on mosques. Territories are be-ing controlled by dozens of militias around whose edges bitter battles are raging. The “Islamic State” has established itself, commits terror, and holds sway in areas such as western Iraq and eastern Syria where Sunni tribes have been marginalized. Air strikes by an international alliance have in-flicted some damage on the “IS,” but have been unable to stop its progress. Instead, Iraqi Shiite militias under the leadership of Iranian generals

are fighting a ground war against the “IS”. The Assad regime has even dropped barrel bombs banned by international law on its own citizens. As a result, millions of people are on the run, most of them within Syria and Iraq. Many have been stranded in Turkey, Lebanon, Jordan and the Kurdish region of northern Iraq. Hundreds of thousands are fleeing to Europe.

Left to themselves, the local warring factions will find it difficult to bring the fighting to an end. The fact is that both small and larger Middle Eastern powers such as Turkey, Iran, Qatar, the United Arab Emirates, Saudi Arabia, Egypt and Israel, are influencing or fuelling the various ethnic, reli-gious and political conflicts in the region.

2sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

increasing Iranian influence in the region, there is growing unease in Riyadh about US policy on the Middle East. Saudi Arabia is dependent on the US military umbrella and is no longer sure that Washington will provide full-scale protection in the event of a conflict. Riyadh assumes that the recent US-Iranian rapprochement in the wake of the positive outcome of the nuclear negotiations between Iran and the EU/E3+3 will be detrimental for the US-Saudi relationship. The kingdom the kingdom also senses that it is not getting whole-hearted US support for its anti-Assad and anti-Houthi stance, or indeed for its pro-Sisi policy in Egypt. Due to the fact that Saudi Arabia feels both anxious and left alone, the kingdom is increas-ingly ready to assume regional leadership in the Arab League and the Gulf Cooperation Council. Along with other Arab Gulf states, it has pursued a growing militarization of its regional policies. Examples of this are the intervention in Bahrain in 2011, the struggle against the “Islamic State” as part of an international coalition, and the Saudi-Sunni alliance, which in March 2015 began to intervene in the Yemeni civil war by carrying out a number of airstrikes.

Iran, meanwhile, has for many years felt encir-cled in military and political terms by the US and its allies in the region to which Iran also includes

Saudi Arabia versus Iran

Saudi Arabia and Iran in particular have spon-sored a number of different warring factions and conflicting parties in order to consolidate or ex-pand their zones of influence in the Middle East. As part of this hegemonic struggle, both countries are striving for political and military supremacy in the Gulf region. While Iran thinks of itself as the protector of the Shi’a, Saudi Arabia considers it-self a leader of the Sunnis. Ethnic identity is also of some relevance for the Iranians are of Indo-Germa- nic descent, whereas Arabs are a Semitic people.

Inside Saudi Arabia, there is a deep mistrust of Iran. The House of Saud sees the Islamic Republic as the winner of the collapse of Arab state struc-tures. Iran, so the thinking goes, profits from the rule of the militias, which includes Hezbollah in Lebanon, from the Assad regime in Damascus, and from the Shia groups in central and south-ern Iraq. Riyadh is convinced of an Iranian hid-den hand ranging from the conflict between Shi’a and Sunnis in Bahrain, the territorial gains made by the Shi’a Houthi rebels in Yemen, to support for Shi’a groups in the eastern provinces of the kingdom. Furthermore, many Saudis believe that the Iranian mullahs are intent on exporting their version of Islam. In addition to fears about the

Source: polgeonow.com

Syria and Iraq Disintegrating

Syria

Iran

Saudi Arabia

Kuwait

Jordan

Israel

Turkey

Egypt

Iraq

Lebanon

MediterraneanSea

Gulf

Kurdistan Government

Kurdish groups (PYG)

Syrian regime

Rebel groups

“Islamic State” (“IS”)

Shia south Iraq

Karbala

Homs

Hasakah

Basra

BaghdadRamadi

Fallujah

Samarra

Amerli

Kirkuk

Irbil

Mosul

Sinjar

Haditha

Qaim

Tikrit

Damascus

Marea

AleppoRaqqa

Deir ez-Zor

Golan Heights

3sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

Saudi Arabia. The hardliners in Iran believe that this encirclement is simply the prelude to an attempt at regime change. Apart from this, Tehran suspects that in the struggle against the Assad regime Riyadh and the West intent to sev-er Iran’s links with the Shi’a Hezbollah group in Lebanon, and weaken Iran’s overall influence in the Middle East. The regime thus feels on the defensive, and has increasingly opted for direct military, financial and political support for Shi’a militias and other groups in the Arab world. In addition, Iran’s nuclear and missile program is supposed to act as a deterrent. Within the context of the struggle against the “Islamic State”, the argument now heard in Tehran is that Iran’s interests are the same as those of the US. Parts of the leadership fear that “IS” may infil-trate the marginalised Arab-Sunni minority in western Iran.

The bottom line is that without a rapprochement between Saudi Arabia and Iran, it will be impos-sible to defuse, bring to an end or resolve the local conflicts currently raging in Lebanon, Syria, Iraq and Yemen. In fact, there is a danger that local wars will continue to escalate, that there will be an arms race, and that mutual perceptions of one another will further deteriorate.

Prospects for Easing of Tensions

But there are also signs of potential thaws in Saudi-Iranian relations. King Salman bin Abdelaziz Al-Saud, the new Saudi monarch, has appointed Muhammad Bin Nayef, the long- serving Minister of Interior, to the position of crown prince in the kingdom. Prince Mohammed Bin Nayef is also chairman of the newly estab-lished Political and Security Affairs Council, a key position. The Crown Prince has the reputation of being a level-headed political realist who will not risk an unnecessary confrontation with Iran.In Tehran, the nuclear agreement has strengthened the hand of those supporters of President Hassan Rouhani who are prepared to compromise and who wish to overcome Iran’s international iso-lation. Even if scepticism is still rife in Riyadh, King Salman bin Abdulaziz has given a cautious welcome to the EU/E3+3 framework agreement with Iran concluded in April 2015 and has ex-pressed the hope that it will make a contribution to security and stability in the region.

In the long run, however, the nuclear agreement with Iran can prove more effective and lasting if it is complemented by other initiatives which seek to create trust in the region and to contain the current conflict areas. On its own, the nu-clear agreement unfolds too little impact. There is a danger that a nuclear arms race will simply been deferred for a few years, while the hostilities and proxy wars in the region continue unabated. Instead, the development of confidence-building measures and collective security systems are the only steps which can stop this downward spiral.In the past, both Iran and Saudi Arabia have come out with proposals for a security system in the Gulf region. As early as 2004, at the Manama Dialogue in Bahrain, former Saudi foreign minister Saud al-Faisal outlined a security system based on four pillars: a united Gulf Cooperation Council (GCC); a stable Iraq; a friendly Iran; and a prosperous Yemen. The system as such would receive inter-national support from the UN Security Council. In January 2007, at the World Economic Forum in Davos, Hassan Rouhani, who has been President of Iran since 2013, presented a ten-point plan for security and cooperation in the Gulf region.

Critics content that Iran and Saudi Arabia simply do not feel sufficient pressure to encourage them to bury the hatchet and to cooperate on a regional level. At the same time, both states could soon find themselves under socio-economic pres-sures to engage leading to some form of common

Source: polgeonow.com

Yemen Implodes

Yemen

Oman

Saudi Arabia

Gulf of Aden

An�-Houthi organiza�ons

Al Qaeda and allies

Houthi and Saleh loyalists

RedSea

ArabianSea

Djibou�

Eritrea

EthiopiaSomalia

Sana’a

Al BaydaMukalla

Aden Socotra

4sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

to more employment opportunities and greater revenues. If, in sub-regional negotiations of this kind, “positive socio-economic incentives” are not enough to persuade governments to change their policies, “negative security policy incen-tives” such as, for example, common fears about the spread of the “Islamic State” could provide such a basis. The fact that “IS” will, it appears, continue to exist for an extended period of time in eastern Syria and western Iraq, will even make territorial gains from time to time, and com-mit more terror, is alarming as far as Riyadh and Tehran are concerned. Such fears could prompt Saudi Arabia and Iran to reach a compromise in the Syrian conflict, including removing the lead-ership of the Assad regime and replacing it with a transitional military council which will include a significant number of Alawites.

A CSCE for the Gulf

Thus, a certain basis for an initiative towards a Gulf negotiating process exists. To proceed, it would have to be structured on parallel tracks. Important political topics such as the war against terrorism, the future of Syria, Iraq and Yemen,

interests. For example, all of the states in the region are facing the demographic challenge of fulfilling rising expectations of their youthful citizens, and of providing educational and em-ployment opportunities for a growing number of young people. Additional expenditure on welfare projects and the expansion of the rentier economy will not be enough in order to deal with this po-tential source of unrest. For the moment, Riyadh can fall back on its capital reserves while Teheran can expect an increase in its revenue as a result of the easing of sanctions.

Less Oil, More Trade

According to the recent BP Statistical Review of Energy, global consumption of oil and gas is fore-casted to continue to decline even during periods of economic growth. As a result, the budgets of Iran and Saudi Arabia (which are predominantly based on oil and gas revenues) will shrink. With less money available for welfare projects, the governments will have to find other sources of income. Here, an increase in regional trade, a greater level of investment, and an upsurge in the manufacturing and services sector will lead

Gulf: Economic and Social Data

Source: Gulf Research Center

Popula�on 2014 (m

illions)

Percen

tage u

nder 25 Ye

ars

GDP Growth Rate (%

) 2014

Percen

tage o

f World

wide

Gas Rese

rves

Size o

f Sove

reign

Wea

lth Fu

nds (bn $)

Percen

tage o

f World

wide

Oil Rese

rves

GDP 2014 (bn $)

Unemploym

ent R

ate

Per Cap

ita In

come (

$)

Rate of In

fla�on (%

)

Saudi Arabia

Iran

Iraq

Yemen

United Arab Emirates

Qatar

Oman

Bahrain

Kuwait

30.6

78.0

35.9

24.1

9.3

2.2

3.7

1.2

4.0

50.8

55.7

60.6

65.4

31.0

33.6

51.5

44.0

37.8

54.73

105.48

57.93

84.38

13.5

2.6

6.81

1.27

4.92

34

75

120

154

40

31

56

44

46

801.0

431.0

231.0

40.0

425.0

222.0

84.0

35.0

189.0

4.2

1.7

0.1

2.0

4.9

6.0

3.8

3.7

2.6

5.6

11.5

15.9

17.0

4.1

0.6

8.1

4.5

2.3

26.170

5.534

6.429

1.463

45.685

99.285

22.600

29.200

47.380

2.9

18.8

3.4

10.4

2.6

3.4

1.7

3.1

3.1

763

62.0

N/A

N/A

1,007

256

19

11

548

4.4

18.2

1.9

0.3

3.3

13.3

0.5

0.1

1.0

15.8

9.3

8.9

0.2

5.8

1.5

0.3

<0.1

6.0

Popula�on Es�

mate 2050 (m

illions)

Rank H

uman D

evelo

pment

Index 2014

5sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

and relations between Iran, Saudi Arabia and the other GCC states should be at the top of the agen-da. Such high-level political dialogue should at the same time be complemented by negotiations on specific pragmatic topics which can make a contribution to the confidence-building process. Suitable negotiating topics would be a policy on refugees, infrastructure projects, environmental protection measures including improved sup-plies of drinking water, cooperation in the energy sector, the expansion of regional economic rela-tions, a common framework for trade and invest-ment, and a common regional labour market. This dual-track negotiating structure for the “Gulf” sub-region is based in principle on the model of the successful Conference for Security and Cooperation in Europe (CSCE), which was held in the 1970s, and on its three negotiating baskets - one for political and military questions, one for economic and environmental topics, and one for humanitarian and human rights issues.

The Final Act of the CSCE was signed in Helsinki 40 years ago, and the Conference later developed into an institution, the OSCE, with its head-quarters in Vienna. That the OSCE has not lost its relevance following the end of the East-West conflict is currently underlined by the important conflict management role the organization plays in eastern Ukraine. To be sure, the CSC process in Europe cannot simply be copied and transferred lock, stock and barrel to the Gulf region. However, the principle of collective security promoted by confidence-building measures that are specified in three working groups (or “baskets”) is also of importance for the striving of peace, security and cooperation in the “Gulf” sub-region.

The “Gulf” sub-region in the Middle East com-prises Saudi Arabia and Iran, and the smaller Gulf states, i.e. the United Arab Emirates, Kuwait, Bahrain, Qatar and Oman. Riyadh will insist that any negotiating process will focus on the over-all regional situation and not only on relation-ship between Riyadh and Tehran. On the one hand, this will enable the Saudis to point to the existence of a broad and united Arab front. On the other, it will help to allay fears in the smaller GCC states that Saudi Arabia is trying to conclude separate agreements behind their backs. That is why it is important to incorporate all of the GCC

states. In geographical terms, Iraq and Yemen

are also part of the “Gulf” sub-region. After the controversial period of Prime Minister Nouri al-Maliki, Iraq has a new leadership under Prime Minister Haider al-Abadi and a government that is recognized by both Iran and Saudi Arabia. And although the central government in Baghdad has only a very tenuous hold on parts of the west of Iraq, and has to coordinate its policies with the autonomous Kurdish government in northern Iraq, the al-Abadi administration should have a place at the negotiating table. Yemen should also be invited to participate in the Gulf negotiating process, though only after the formation of an in-clusive and viable government.

The basic framework for a negotiating process in the Gulf sub-region would thus initially be a 6 + 2 setup (the six states of the Gulf Cooperation Council, and Iran and Iraq) to be joined by Yemen as soon as there is a recognized and inclusive gov-ernment in Sana’a.

Turkey, Israel and Egypt are important regional powers in the Middle East with influence and interests in the Gulf region. The brokers of a Gulf negotiating process should keep their eye on these three countries in order to incorporate them at a later stage into (or into sections of) the negotiations.

Given the current climate in the region and in order to provide such a process with a potential for success, it is important that the idea for such a diplomatic initiative should come from outside the region and indeed from a powerful external actor acceptable to all sides who will issue invita-tions and act as a moderator.

Who should moderate?

The constellation of a “Gulf” mediation group could take on a variety of forms. The US, Europe (in particular the larger member states United Kingdom, France, and Germany), Russia, China, India and Japan are all important actors in the Gulf region and possess various ways to exert influence on Iran and Saudi Arabia. On a diplo-matic level, they could prove useful as mediators and sponsors in order to persuade the conflict-ing parties to come to the negotiating table. This list includes all the Permanent Members of the UN Security Council. It could be possible to form

6sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

with the US, which maintains a powerful military presence in the region. Japan is an Asian mem-ber of the OSCE and in 2016 Germany will assume the chairmanship of the OSCE, which, along with its instruments, principles and modules, could provide a blueprint for a Gulf CSC.Furthermore, there are two regional mediation platforms that also present themselves. One of them is the Organization for Islamic Cooperation (OIC), the members of which include Iran, Iraq, and the 6 GCC states. The other is the Sultanate of Oman, which is a member of the GCC. It maintains bet-ter relations with Iran than any of the other Arab Gulf states. In 2013, Muscat brokered the first

a “Gulf” mediation group made up of P5 repre-sentatives coupled with diplomats from Berlin, New Delhi and Tokyo. Other mediating group structures are also conceivable, i.e. a duo consist-ing of the European Union and China. While both have widespread economic interests in the Gulf region, they do not play an overt role in security policy terms. They could therefore come across as being more or less neutral. One could also envi-sion two nation-states, Germany and Japan, act-ing as mediators. Neither of these countries has a colonial past in the region. They are not perma-nent members of the UN Security Council, but are still very influential in the UN and on good terms

Design for a dual-track Gulf negotiating process

Source: Bertelsmann Stiftung

Bahrain,Qatar, Kuwait,

Oman, Saudi Arabia,United Arab

Emirates, Iran, Iraq,Yemen

To involve as Process proceeds:

Egypt, Israel, Turkey

Specific Topics

Dealing with refugees

Infrastructure projects

Environmental Protection Measures

Improving and Securing Water Supplies

Cooperation in the energy sector

Expansion of regional economic relations

A common framework for trade and investment

A common regional labour market.

Political Issues

Combatting Terrorism

Future of Syria

Future of Iraq

Future of Yemen

Relations Iran/Saudi Arabia

and GCC States

Potential constellation of a “Gulf” mediation group

A. P 5+1 (United States, Russia, China, United Kingdom, France and Germany), Japan and India

B. EU and China

C. Germany and Japan

D. Organization for Islamic Cooperation (OIC)

E. EU 3+3 (Germany, France, UK + China, Russia, USA) + Iran, Iraq, and GCC countries + (Yemen)

7sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

important bilateral talks between Washington and Tehran, and at the moment Oman is playing a crucial mediation role in the Yemeni civil war.

It is also conceivable that, after the finaliza-tion of the details within the current framework agreement on the Iranian nuclear programme, the bilateral EU/E3+3 talks with Iran could be transformed and turned into a sub-regional ne-gotiating process. In other words, they could be expanded by incorporating other regional actors, i.e. Iraq and the GCC, and, if it becomes necessary to do so, the mediating states alluded to above.

Sceptics have pointed out that given that the an-tagonists in Riyadh and Tehran appear as yet not ready to resolve their conflict, the role of media-tors will be unable to make an impact.

This may well be the case. However, given that the dramatic consequences of the Middle East wars call for diplomatic engagement, that there exists a certain willingness in both Iran and Saudi Arabia to talk and to consider areas of agreement, and that the conclusion of a nuclear agreement with Tehran may well encourage politicians to come up with new and creative political and diplomatic solutions designed to contain and defuse some of the conflicts and divisions in the Gulf region, suggests that a mediation initiative should be at-tempted and pursued. A Gulf CSC can provide a framework and a process within which the states of the “Gulf” sub-region can address the press-ing problems of the region in a peaceful manner. Without a comprehensive diplomatic initiative, the downward spiral of violence threatens to con-tinue unabated. Moreover, a Gulf CSC can func-tion as a kind of diplomatic and political safety net which will prove its worth if the implementation of the nuclear agreement grinds to a halt or turns out to be a failure.

8sp

otlig

ht e

urop

e #

20

15

/ 0

2

A Gul

f CSC

Cou

ld B

ring

Pea

ce a

nd S

ecur

ity

Responsible:

Bertelsmann StiftungCarl Bertelsmann Straße 256D-33311 Güterslohwww.bertelsmann-stiftung.de

Isabell Hoffmannisabell.hoffmann@bertelsmann-stiftung.deTelefon +49 5241 81 81313

Joachim Fritz-Vannahmejoachim.vannahme@bertelsmann-stiftung.deTelefon +49 5241 81 81421

ISSN 1865-7443

Latest editions:

spotlight europe # 2015/01Turbulent Times in the Disunited KingdomJoachim Fritz-Vannahme

spotlight europe # 2014/02The Populist NetworksIsabell Hoffmann

spotlight europe # 2014/01North Africa – Crisis and ConsensusChristian-P. Hanelt

All "spotlight europe" editionscan be downloaded from: www.bertelsmann-stiftung.de/spotlight

Further reading:

Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran's Nuclear Program, April 2015.http://www.state.gov/r/pa/prs/ps/2015/04/240170.htm

Website of the OSCE related to the organization’s working group. http://www.osce.org/what

Current Figures, Data and Facts of the 2016 Bertelsmann Transformation Index for the Middle East region. http://www.bti-project.de/reports/laenderberichte/index.nc

Publications of the Gulf Research Center on Regional Security Issues.http://grc.net/index.php?sec=Publications&sec_type=h&sub_opt=68&override=Publications

BP Statistical Review of Energy, June 2015.http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-world-energy.html

SIPRI Yearbook 2015 Outlook armaments and international security.http://www.sipri.org/yearbook

Conference Report, 15th Körber Dialogue on the Middle East, Berlin, April 2015.http://www.koerber-stiftung.de/internationale-politik/sonderthemen/neue-un-ordnung-in-nahost.html

Giath Bilal, Zenith, der „islamische Staat“: interne Struktur und Strategie, May 2015.http://www.ghiathbilal.com/index.php/De/248-der-islamische-staat-interne-struktur-und-strategie

Mathias Brüggmann, Leitartikel, Handelsblatt, „Annäherung und klare Kante“, June 3rd, 2015. http://goo.gl/EUwmL3

Böhm, Musharbash, Svensson, Die Zeit: Analyse: „Warum der islamische Staat gewinnt“, June 3rd, 2015. http://www.zeit.de/2015/23/islamischer-staat-staerke-gegner

Adnan Tabatabai, Lobelog.com, „Nuclear Talks: Paradigm Shift in Iran Foreign Policy?“, June 25, 2015. http://www.lobelog.com/nuclear-talks-paradigm-shift-in-iran-foreign-policy/

Bauer, Hanelt, Koch: The EU-GCC Partnership: Security and Policy Challenges, Al-Jisr Project on EU-GCC Public Diplomacy and Outreach, 2010.http://aljisr.ae/sites/default/files/EU-GCC_Partnership_Security_Policy_Challenges_ENG.pdf